A lack of oversight on Defense Department contracts has left more than 80 percent of taxpayer-funded Afghanistan projects vulnerable to direct funding of terrorists, including the Taliban. (Photo by John Moore/Getty Images)

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WASHINGTON (CBS DC) — A lack of oversight on Defense Department contracts has left more than 80 percent of taxpayer-funded Afghanistan projects vulnerable to direct funding of terrorists, including the Taliban.

According to the April report from the Special Inspector General for Afghanistan Reconstruction (SIGAR), the U.S. Defense Department does not have “reasonable assurance that U.S. government contracting funds are not being provided to persons and entities supporting the insurgency and opposing U.S. and coalition forces. As a result, millions of contracting dollars could be diverted to forces seeking to harm U.S. military and civilian personnel in Afghanistan and derail the multibillion dollar reconstruction effort.”

A SIGAR spokesman said $5 million has been paid to contractors affiliated with the Taliban – a massive sum of money in a country with a per capita GDP of $1,000.

The bipartisan report, entitled “Contracting with the Enemy,” was compiled following a year-long investigation. The report notes that the military has recently launched its own investigations of the situation and has taken some steps to address it. In one of the most significant steps, Gen. David H. Petraeus, the former top U.S. and NATO commander in Afghanistan, has issued new guidelines for contractors.

A 2012 Associated Press report found that the Taliban could be using U.S. tax dollars to kill American soldiers. The U.S. military estimates that up to $360 million ended up in the hands of Taliban and criminal elements in Afghanistan over the past decade.

“The possibility that taxpayer money could be supporting the insurgency is alarming and demands immediate action,” said John Sopko, a SIGAR spokesman. “Every effort should be made to implement stronger controls that protect our troops and ensure the success of our reconstruction efforts.”

According to the U.S. Central Command, the report noted there were more than 112,000 Defense Department contractor personnel in Afghanistan as of April 30. By May, more than 26,000 armed private security personnel – made up almost entirely of Afghans – worked for the Pentagon and other U.S. agencies.

The report lists numerous errors within the DOD contracts, citing a series of inconsistencies in wording and accuracy:

“Some contracting authorities never received Central Command’s list of groups forbidden to receive U.S. money. Contracting authorities did not consistently tell contractors about restrictions. The Defense Department does not have a blanket policy on how to inform contractors of forbidden subcontractors. Central Command only began posting restricted groups on its Web site in early 2013. Contractors have no obligation to view the list.”

That failure has cost American lives, undermined the U.S. mission and the Afghan government, and “helped play into the hands of the enemy,” Sen. Carl M. Levin, chairman of the Senate Armed Services Committee, told the Washington Post.